IDC China: Official Issuance of 5G License, Speeding up the Construction of 5G around Commercial Value

MIIT (the Ministry of Industry and Information Technology) of China on June 6, 2019 officially issued 5G licenses, which were issued to China Mobile, China Telecom, China Unicom and China Radio and Television Network Co., Ltd. This means that China has officially entered the era of 5G communications.


The issuance of the 5G license demonstrates the Chinese government's determination to promote the development of the 5G industry, and policy support is expected to continue to strengthen in the future.The issuance of 5G license is an important milestone in the development of China's communications industry.The faster connection rate, lower wireless interface latency, and higher connection density brought by 5G will bring a better connection experience for consumers on the one hand, and more importantly, the commercial use of 5G will drive the application and landing of the Internet of things in the industry.It is an important prerequisite for accelerating the development of China's digital economy and one of the main means to realize China's industrial upgrading and stimulate domestic demand through "new infrastructure".


China's 5G construction should be carried out around commercial value.


In fact, before the issuance of the 5G license, the three major operators in China have extensively carried out 5G large-scale verification. Exploring new application scenarios and new business models is the top priority of 5G development. The three major operators are listed companies. In addition to the need to assume social responsibility, but also to be responsible for the shareholders.


IDC believes that China's 5G construction should focus on commercial value, especially to explore the business value and business model of To B (industry market).


At the same time, the issuance of 5G license will not have a fundamental impact on the rhythm of 5G network construction. Under comprehensive consideration, Chinese operators will continue to promote 5G network construction and application landing in a targeted and rhythmic manner. In addition, IDC believes that the commercial and deployment of 5G will not be achieved overnight. The 5G network adopts the brand-new network technology architecture, the new wireless interface technology, the network slice technology, the network function virtualization technology and so on, which all pose a lot of technical challenges for the production of 5G.


IDC believes that achieving full coverage of the 5G network faces a number of challenges beyond the technology:

Cost

Because 5G uses higher wireless spectrum and wants to achieve continuous coverage, the number of 5G macro stations will be 1.2 to 1.5 times that of 4G base stations, under the pressure of the "speed up and reduction fees " policy and the "unlimited" package.

How to help operators reduce the cost of 5G network construction is very important. In addition, with the deployment of 5G network, Chinese operators will shoulder the parallel management of 2-3 / 4 / 5G networks, how to help operators to automate operation and maintenance, reduce operation and maintenance expenses (OPEX), is also indispensable.

Business scenario

Although the 5G R15 standard has been frozen, at present, only eMBB (enhanced Mobile Broadband) scenarios can be commercialized. How to give full play to the technical characteristics of 5G network and achieve commercial revenue is also one of the key issues for operators to consider.

At present, under the condition that the application scenario is not completely clear, how to help operators expand their business scenarios and find "killer" applications will be the core value of 5G business.


Business model

With the promotion of unlimited packages, the traditional business model of charging by traffic will no longer be applicable to new business forms, especially for 5G large bandwidth services, if fees continue to be charged according to traffic, It will be difficult to accelerate the implementation and promotion of 5G service. How to design a new billing mode and provide multi-quantity, multi-dimensional and multi-mode billing standards will also be one of the important issues for operators to consider.

Despite a series of internal and external challenges, the pace of development of 5G in China will not be hindered, IDC commented. In the 5G era, China is synchronizing with the development of global wireless communication technology for the first time, and it is bound to encounter complex and diverse problems, and the challenges facing China.


It is a problem that needs to be solved by the whole communication industry. IDC believes that which of the operators, equipment manufacturers, or industry solution providers in the industry chain can take the lead in solving these problems will become the industry leader as well. Which country can use a more open and positive attitude to promote the development of 5G industry, will be in the leading position in the global 5G development.


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